EP: Over the last two to three years, there’s been a fair amount of momentum building with not only OEMs, but also contractors and distributors. The industry seems to have gotten a grip on the new regulations and the new economy. I am optimistic the overall health of the industry will continue to improve. The only caveat that I would offer is ongoing regulations create uncertainty. One of those is economic uncertainty in regards to the cost of efficiency and the cost of environmental requirements around refrigerants. These are things the industry needs to get its head around.

KG: What segment of the industry do you see growing most in the near future?

EP: Overall, I think the residential market has been pretty good. It has not grown quite as fast as many economists were predicting two or three years ago. I think you are going to continue to see good growth in the residential sector. I think the idea of pent-up demand is something a lot of people talk about, but I am not sure we are going to see a leap in growth simply because I’m not sure people can afford air conditioning equipment in today’s tough economy where wages have not grown. The commercial sector has been very solid for a few years, and I think that will continue. We see the refrigeration business as being a little vertical-market dependent. I see it as growing a little slower.

KG: There’s a lot of discussion about regional standards, and Emerson has produced some good surveys lately about contractor awareness. Do you think the industry is ready and how do you think enforcement should be handled?

EP: I am optimistic the industry is ready. It looks like enforcement is going to be driven by labeling and record-maintenance requirements. I am optimistic this is going to end in a positive place and that enforcement is going to be practical.

KG: How involved do you feel the government should be in the industry, and how does the industry work with government?

EP: Government involvement in the industry is somewhat inevitable. I do not mean that in a negative context. I think the right government involvement can be positive. I think the federal government can help us with the right set of rules and regulations, such as a rule that would preempt a state requirement that would drive the industry to have multiple regulations depending on what state they are selling into. Having said that, I think the challenge is when the government becomes prescriptive in its solutions. I believe the best approach of government involvement is for government and industry to work together toward reasonable targets, and then the government lets the industry decide how to get to those targets. Historically, that approach has worked pretty well. Recently, I think the government has gotten more involved in prescriptive solutions, and that is a problem. That can inhibit the ability of the industry to get to the ultimate goal that both parties want to get to.

KG: Connected smart products for the home have really increased in popularity recently. I know you guys have the Sensi, but talk about the trend in general and where you see that going.

EP: First of all, I agree. After 30 years of discussing smart homes and connectivity, the time has come. I think the trend you are going to see is a rapid adoption of connected points in a home. Today, you can buy smart security systems, smart appliances, smart garage door openers, and connected thermostats. The awareness of homeowners in terms of what type of value can be derived is growing. There are a couple of next steps. The usability and functionality of these devices are going to grow. Like most technologies, these first entries were functional, but not optimal. That is going to change. You are going to see more functionality with a Sensi thermostat or a connected appliance. The second trend you are going to see is that all the connected devices will become integrated into entire home solutions. The reality now is that you have to have separate apps for various connected products in your home. That is a natural progression for how the industry will move. But, over time, homeowners should expect and demand more apps that will integrate various home solutions, though it will take time.

KG: From your position, you get a good 30,000-foot view of the industry. Any trends you are seeing that maybe contractors are not?

EP: One is more and more electronics in systems. It will be a slow road because contractors need to learn how to apply and accept them. I think you will see more technology come into systems in time. The good news is this technology will be contractor-friendly. It will be designed around the concept of how do you provide contractors with better diagnostics and make the job of maintaining equipment easier? But, it does mean more contractors must become more comfortable with the concept of working with electronics versus mechanical systems. The second thing is the idea of Wi-Fi connectivity becoming more a part of people’s lives. As we have seen, things like wireless thermostats have arrived in the marketplace. We’ve seen contractors that are not as comfortable working in that environment. That will need to change. The expectation of contractors’ skill sets are going to grow in this new environment.

KG: How does the HVAC industry attract more individuals?

EP: Not only is attracting talented people the No. 1 problem in the industry today, I think the worst is ahead of us. If you look at the average age of contractors and the number of people the industry is attracting, it’s an obvious challenge. We have to make this industry appealing all the way back into the high school level. We have not done a good job of marketing this industry to young people while they’re making their career decisions. They are migrating to what they view as more alluring industries, like IT [information technologies]. What they don’t know is this is becoming a more tech-savvy industry and it is an extremely well-paying industry. It is a great career path for people.

KG: Now, I will let you brag a little bit. Tell us about this new innovation center you guys are building at Dayton University.

EP: The Innovation Center in Dayton is something we announced last July. I never anticipated the response we received from the community and the industry. The genesis of this idea was built on a lot of the things we talked about today and the fact that the world is getting a lot more complicated. We are excited about the idea of innovation and collaboration. We put it at the University of Dayton because we think it’s a great opportunity to look out into the future and bring the future thinking minds into this experiment. We want to have them work with us to develop these far-reaching, never-been-done-before solutions for the industry. It’s going to be a research lab, a teaching facility, a state-of-the-art innovation center, and a location where the industry can come together and talk about all these issues. We are shooting for late 2015 as a completion date. This is an advanced facility. It is not your mother’s lab. We’ve broken ground and we are going to have a lot of fun there.

Publication date: 12/15/2014

Want more HVAC industry news and information? Join The NEWS on Facebook, Twitter, and LinkedIn today!